Swiss financial services firm Credit Suisse Group will eliminate additional 2,000 jobs this year as part of its plans to step up cost cuts. The new measures come just five months after CEO Tidjane Thiam announced an overhaul of the Zurich-based lender.
Credit Suisse announced in a statement Wednesday that the bank plans to cut risk-weighted assets in global markets to about $60 billion this year as compared to a previous target of between $83 billion and $85 billion. The Swiss lender, which is projected to post a loss in the first quarter, is targeting 6,000 job cuts this year, with gross savings of $1.7 billion. Last month, the company vowed to step up its downsizing program by eliminating 4,000 jobs by 2018.
“Today, we are announcing an increase to our 2018 cost reduction target from 3.5 billion Swiss francs ($3.59 billion)gross savings to at least 4.3 billion francs ($4.3 billion), driving our absolute operating cost base below 18 billion francs ($18 billion) by 2018. For 2016, we aim to achieve 1.7 billion francs ($1.7 billion) in cost savings,” Thiam said in a statement.
Thiam added that since the company announced an overhaul in October, it has made “good progress in reducing our fixed cost base across the organization and our cost program is moving at pace.”
The company also said that it is increasing its net cost savings of 2 billion francs ($2 billion) by 2018 to at least 3 billion francs ($3 billion).
“This will lead to an operating cost base of below 18 billion francs ($18 billion) by end-2018. The Global Markets’ cost base will be reduced from 6.6 billion francs ($6.6 billion) at end-2015 to 5.4 billion francs ($5.4 billion) by end-2018,” Credit Suisse added.
Wednesday’s announcement came after Credit Suisse’s co-CEO John Cryan said at Deutsche Bank AG last week that he does not expect to post a profit this year, Bloomberg reported.
“Our efforts aim at putting Credit Suisse in a position to generate capital and grow profitably in the medium and long term,” Thiam said in the statement. “The measures we are taking to strengthen our capital base and reduce our operating costs will improve our resilience and flexibility going forward.”
During early morning trade on Wednesday, Credit Suisse shares were up 0.7 percent in Zurich. However, the company's stocks have dropped over 33 percent so far this year, underperforming the broader SMI index which has fallen 10 percent.